Question
Clark Industries use ABC to allocate overhead costs. Clark manufactures 9,817 L3BASIC and 4,789 M4ADVANCED. The activities and the overhead costs of each activity are
Clark Industries use ABC to allocate overhead costs. Clark manufactures 9,817 L3BASIC and 4,789 M4ADVANCED. The activities and the overhead costs of each activity are as follows:
Activity Costs
Machine Setup $200,000
Machine Repair $300,000
Factory Maintenance $100,000
Cleaning Workplace $50,000
Sampling Product Quality $150,000
Total Overhead Costs $800,000
Clark uses 3 pools to assign overhead:
SETUP (includes Machine Setup and Machine Repair) DRIVER: # OF SETUPS
FACTORY SERVICES (includes Factory Maintenance and Cleaning Workplace) DRIVER: SQUARE FEET
QUALITY CONTROL (Sampling Product Quality) DRIVER: # OF LOTS
Products SETUPS LOTS SQUARE FEET
L3BASIC 70 25 12,000
M4ADVANCED 55 35 18,000
How much overhead should be allocated to 1 unit of M4ADVANCED
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